KE-90_4100_sap_2

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© SAP UCC, Stefan Weidner May 2008 Page 1 of 16

Integration Case StudyCO

SAP ERP ECC 5.0

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Table of Contents

TERMS OF REFERENCE AND SCENARIO........................................................... ................................................... 3

PREPARING THE MASTER DATA ............................................................... .............................................................. 4

CREATING COST CENTERS .......................................................... ............................................................... .................... 4

Creating Cost Center for Canteen.................................................................. ......................................................... 4

Creating Cost Center for Maintenance .......................................................... ......................................................... 4

Creating Cost Center for Assembly ................................................................... ...................................................... 5

CREATING STATISTICAL K EY FIGURE “NUMBER OF EMPLOYEES”.............................. ................................................... 5

CREATING SECONDARY COST ELEMENTS ........................................................ .............................................................. 6

Creating Secondary Cost Element for Canteen Assessment............... ..................................................................... 6

Creating Secondary Cost Element for Activity Allocation of Maintenance Hours.................................................. 6

Creating Secondary Cost Element for Activity Allocation of Assembly Hours........................................................ 6

CREATING ACTIVITY TYPES........................................................ ............................................................... .................... 7

Creating Activity Type for Maintenance Hours.................................................................................. ..................... 7 Creating Activity Type for Assembly Hours ............................................................................................................ 7

CREATING COST CENTER GROUP FOR THE CANTEEN ASSESSMENT ............................................................ ................... 8

COST CENTER PLANNING....................................................... ............................................................... .................... 9

PLANNING THE NUMBER OF EMPLOYEES ......................................................... .............................................................. 9

PLANNING ACTIVITY OUTPUT............................................................... ................................................................ ......... 9

PLANNING PRIMARY COST I NPUTS ....................................................... ................................................................ ....... 10

PLANNING I NTERNAL ACTIVITY I NPUTS .......................................................... ............................................................ 10

CREATING ASSESSMENT FOR CANTEEN COSTS ........................................................... ................................................. 11

PERFORMING ASSESSMENT FOR CANTEEN COSTS....................................................... ................................................. 12

AUTOMATIC PRICE CALCULATION OF TWO ACTIVITY TYPES .......................................................... ............................ 13

INTEGRATION WITH THE PP MODULE...................................................... ............................................................ 14

CREATING NEW WORK CENTER FOR COST CENTER ............................................................. ....................................... 14

I NTEGRATING NEW WORK CENTER IN R OUTING ........................................................ ................................................. 15

PERFORMING NEW PRODUCT COST ESTIMATE............................................................ ................................................. 15

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Terms of Reference and Scenario

This case study emphasizes the major master data and planning methods inCost Center Accounting. During the exercises, you will create three cost

center master records and model the internal activity links between them.

In doing so, you will use the principles direct activity allocation andassessment. In conclusion, you will run an automatic price calculation for theactivity types offered by the cost centers. The importance of these prices wasalready discussed in the framework of the case study involving PP masterdata: their amount – assuming the activity types of a production cost center(for example) are involved – has a direct impact on product costing.

In conclusion, you will demonstrate the integration with the PP module, bycreating a new work center with reference to one of the new cost centers.

You will integrate this work center in the routing for manufacturing amotorcycle that you created in the PP case study, and analyze its effects bystarting a new product costing.

Because each participant is supposed to use his or her own master data andtransaction data, each participant’s data has to have different names.Accordingly, all master data objects end with ##. You replace the ##with yourPC or group number. Please follow these naming conventions, as it will

otherwise be impossible to differentiate between the different participants’master data.

Before you start the case study, you can display the transaction codes in theSAP Easy Access menu: Select menu item Extras Æ Settings,

and press ENTER or click to confirm.

Change your SAP GUI settings as follows: Choose , and then Options. Goto the Expert tab. Select the Show Keys in All Dropdown Lists indicator, and

choose ENTER to confirm.

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Preparing the Master Data

Creating Cost Centers

A cost center represents an organizational unit within a controllingarea and specifies a uniquely definable instance where costs areincurred. This definition can be based on functions, settlement specific,geography, or by cost responsibility.

Creating Cost Center for Canteen

In the SAP Easy Access menu, choose Accounting Æ Controlling Æ CostCenter Accounting Æ Master Data Æ Cost Center Æ Individual ProcessingÆ Create (transaction code: KS01).

If the system prompts you to enter the relevant controlling area, enter [1000].Press ENTER to confirm.

Enter ‘CC-CA-##’ as the key for the cost center (substitute yourgroup/computer number for ##). The cost center should be valid from01/01 of

the current fiscal year . Press ENTER or click to confirm.

Enter ‘Canteen ##’ as the cost center name and enter a name for the personresponsible. Select cost center category Service cost center [2] and assignthe cost center to hierarchy area Internal services [H1120]. In addition,choose company code IDES AG [1000], business area Corporate Other [9900], and profit center Motorcycles [1000].

Click to save your cost center

Creating Cost Center for Maintenance

Repeat the above process with the following data:

Cost center: CC-MA-## Valid from: 01/01 of the current fiscal year

Press ENTER to confirm.

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Name: Maintenance ## Person responsible: Any Cost center type: [2] Service cost center Hierarchy area: [H1430] Plant Maintenance Company code: [1000] IDES AG

Business area: [9900] Corporate Other Profit center: [1000] Motorcycles

Click to save.

Creating Cost Center for Assembly

Perform the transaction once again, with the following values:

Cost center: CC-AS-## Valid from: 01/01 of the current fiscal year

Press ENTER to confirm.

Name: Assembly ##Person responsible: Any Cost center type: [1] Production Hierarchy area: [H1420] Production Company code: [1000] IDES AG Business area: [1000] Mechanical engineering Profit center: [1000] Motorcycles

Save your cost center.

Creating Statistical Key Figure “ Number of Employees”

Because the costs of the canteen are assessed for three cost centers(including itself), the number of employees in the cost centers is the allocationbase for cost apportionment. You have to create a statistical key figure forthis purpose.

In the SAP Easy Access menu, starting from the Cost Center Accountingnode, choose Master Data Æ Statistical Key Figures Æ Individual ProcessingÆ Create (transaction code: KK01).

Enter ‘EM-##’ as the key for the key figure and press ENTER. Enter the name‘Number of employees’ and choose Persons [PER] as the unit. The key figurehas the category Fxd val. Click Save.

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Creating Secondary Cost Elements

Internal cost flows and activity flows are always allocated in R/3 usingsecondary cost elements. A cost element classifies the purpose-related, valuated consumption of factors of production within a

controlling area. In contrast to primary cost elements, secondary costelements do not have any corresponding, cost-relevant chart of accounts item (P&L account with the same number).

Creating Secondary Cost Element for Canteen Assessment

In the SAP Easy Access menu, starting from the Cost Center Accountingnode, choose Master DataÆ Cost ElementÆ Individual ProcessingÆ CreateSecondary (transaction code: KA06).

Enter ‘PLA-##’ as the key for the cost element. The cost element should bevalid from01/01 of the current fiscal year . Press ENTER.

Enter the description ‘Plan Ass. CC-CA-##’ and assign it cost elementcategory Assessment [42]. Click Save.

Creating Secondary Cost Element for Activity Allocation of Maintenance Hours

Repeat the process for the allocation cost element for maintenance:

Cost element: MAI-## Valid from: 01/01 of the current fiscal year

Name: Allocation CC-MA-## Cost elem. cat.: [43] Internal activity allocation

Save.

Creating Secondary Cost Element for Activity Allocation of Assembly Hours

Repeat the process for the allocation cost element for assembly:

Cost element: ASS-## Valid from: 01/01 of the current fiscal year

Name: Allocation CC-AS-##

Cost elem. cat.: [43] Internal activity allocation Save.

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Creating Activity Types

Activ ity types are organizational units within the controlling area thatclassify the activities performed by a cost center. As units of measure,they are used to allocate internal activities according to cause.

Creating Activity Type for Maintenance Hours

The first activity type is rendered by the maintenance cost center. To create it,starting from the Cost Center Accounting node of the SAP Easy Accessmenu, choose Master DataÆ Activity TypeÆ Individual ProcessingÆ Create(transaction code: KL01).

Enter ‘M-##’ as the key for the activity type. It should be valid from 01/01 of

the current fiscal year . Press ENTER.

Enter ‘Maintenance hours ##’ as the description. The activity unit is Hour [H],the activity type should be valid for all cost center categories [*]. Chooseactivity type category Manual entry, manual allocation [1] and assign it thecost element you just created [MAI-##] as the allocation cost element. Saveyour activity type.

Creating Activity Type for Assembly Hours

Similarly, create the activity type for the assembly cost center:

Activity type: A-## Valid from: 01/01 of the current fiscal year

Press ENTER.

Name: Assembly hours ##

Activity unit: [H] Hour Cost center cat.: [*] All Cost Center Cate Activity type cat.: [1] manual entry, manual allocationAlloc. cost element: [ASS-##] Allocation CC-AS-##

Click to save your activity type.

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Creating Cost Center Group for the Canteen Assessment

Cost centers can be grouped together to formcost center groups byvarious perspectives, to model the company’s structure as costcenters in the SAP System. You can use these groups to form cost

center hierarchies that summarize the areas for decision-making,responsibility, and control according to the company’s specific needs.

To assess the canteen costs, you want to create a group with the costcenters CC-CA-##, CC-MA-## and CC-AS-## (as receiver of the canteencosts).

From the Cost Center Accounting node of the SAP Easy Access menu,choose Master Data Æ Cost Center Group Æ Create (transaction code:

KSH1).

Name the group ‘GROUP-##’ and press ENTER.

Name the displayed nodes ‘Canteen cost receivers’. Then click

(not ).

In the left-hand column, enter the cost centers CC-CA-##, CC-MA-## andCC-AS-##in that sequence and press ENTER to confirm. The names of the

cost centers should then be displayed (see graphic).

If you see instead, it means you have misspelled one

of the cost centers. Select the involved cost center, click and then .Enter the correct cost center and press ENTER.

Click Save. Then return to the SAP Easy Access menu.

You have now created all the master data you need for this case study. Wewill continue with cost center planning and the integration with the PPmodule.

©SAP

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Cost Center Planning

Planning the Number of Employees

According to company records, 15 people work in assembly, 5 work inmaintenance, and 5 work in the canteen.

Choose Accounting Æ Controlling Æ Cost Center Accounting Æ Planning Æ Statistical Key Figures Æ Change (transaction code: KP46). The planninglayout Statistical key figures: standard (1-301) appears.Choose the Plan/actual version [0] and periods 1 to 12 in the current fiscalyear . Enter cost center CC-AS-## and key figure EM-##. Make sure youleave all the other fields blank. Click Form-Based at the bottom of the

screen. Then click Overview Screen or press F5. Enter 15 as the currentplan value and save.

Repeat the process for cost center CC-MA-##and enter 5 as the current planvalue. Save this plan as well.

Repeat the process again for cost center CC-CA-##. Enter 5 as the currentplan value. Save and choose .

Planning Activity Output

In the following steps, you will plan the total activities of maintenance (1,800hours) and assembly (6,000 hours).

Choose menu item Accounting Æ Controlling Æ Cost Center Accounting Æ Planning Æ Activity Output/Prices Æ Change (transaction code: KP26). Thelayout Activity types with prices: standard (1-201) appears.

Fill the fields Version, Periods and Fiscal Year as in the previous exercise, if they don’t already contain the correct default values.Enter CC-MA-## as the cost center and M-## as the activity type. Leave allthe other fields blank. Then click Overview Screen or click F5. Enter1,800 hours as the plan activity and save.

Repeat the process for cost center CC-AS-## and activity type A-##. Enter aplan activity of 6,000 hours here. Save.

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Planning Primary Cost Inputs

Primary costs are incurred in all three cost centers each fiscal year. Thesecosts are 60,000 for salaries and 90,000 for purchased services in thecanteen, maintenance salaries in the amount of 60,000, and assembly wages

in the amount of 150,000.

Choose Accounting Æ Controlling Æ Cost Center Accounting Æ Planning Æ Costs/Activity Inputs Æ Change (transaction code: KP06). The Cost elementsacty-indep./acty.-dependent (1-101) layout appears.Fill the fields Version, Periods and Fiscal Year as in the previous exercise, if they don’t already contain the correct default values.Enter CC-CA-## as the cost center and Salaries [430000] as the costelement. Leave all the other fields blank. Click Overview Screen or F5.

Enter the plan fixed costs as 60,000. Save.

Repeat the process for cost center CC-CA-## and cost element Purchasedservices [417000]. Again, leave all the other fields blank. Click OverviewScreen or F5. Enter the plan fixed costs as 90,000 and save.

Now enter CC-MA-## as the cost center and Salaries [430000] as the costelement. Leave all the other fields blank. Click Overview Screen or F5.Enter the plan fixed costs as 60,000 and save.

Now enter cost center CC-AS-##, activity type A-## and cost element Directlabor costs [420000]. Now that you have added the activity type, the primarycost input can now be planned activity specifically – that is, with a fixed andvariable price. Then click Overview Screen . The Plan variable costs fieldshould now be ready for input. Enter 150,000 here and save.

Planning Internal Activ ity Inputs

During the current fiscal year, the assembly department plans to have theirequipment checked regularly by the company’s internal maintenance team. They estimate an effort of 600 maintenance hours.

To plan this, from the Cost Center Accounting menu, choose Planning Æ Costs/Activity Inputs Æ Change (transaction code: KP06). The Cost elementsacty-indep./acty.-dependent (1-101) layout appears. Because this screen isonly suitable for cost elements, not activity types, click to go to the nextlayout, Activity input acty-indep./acty-dep. (1-102).

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Fill the fields Version, Periods and Fiscal Year as in the previous exercise, if they don’t already contain the correct default values.

Enter CC-AS-## as the cost center, CC-MA-## as the sender cost center, andM-## as the sender activity type. Leave the other fields blank. Go to the

overview screen and enter 600 hours as plan fixed consumption. Save.

To check your planning so far, from the Cost Center Accounting menu,choose Information System Æ Reports for Cost Center Accounting Æ Planning Reports Æ Cost Centers: Planning Overview (transaction code:KSBL). Then run this report for each of your three cost centers (clickExecute or press F8).

You can see that your cost centers have been charged with primary costs. In

addition, you can also see the total inputs and internal allocation quantities inmaintenance and assembly.

Creating Assessment for Canteen Costs

In the Cost Center Accounting menu, choose Planning Æ Allocations Æ Assessment (transaction code: KSUB). Then choose Extras Æ Cycle Æ Create. Chose your valid cycle, ‘C-##’, which is valid from01/01 of the currentfiscal year ‚ and press ENTER to confirm. Enter ‘Cycle CC-CA-##’ as text,

uncheck the Iterative field, and click .Enter ‘SEG-##’ as the segment name. Enter PLA-## as the assessment costcenter in the Segment Header tab page.Enter CC-CA-## as the Sender Cost Center (from) and cost center group GROUP-## as the receiver in the Senders/Receivers tab page.

©SAP

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Choose the value Plan Stat. Key Figures [6] in the “Var.portion type” field inthe Receiver Tracing Factor tab page. The message “Maintain fields Stat.Key fig.” indicates that new fields are displayed for maintenance. Choose thePlan/actual version [0] and statistical key figure EM-## as the selectioncriteria.

Click Save, click to go back three times, and confirm the subsequentconfirmation prompt with YES.

Performing Assessment for Canteen Costs

Enter C-## in the Cycle field of the Execute Plan Assessment: Initial Screen and press ENTER. Uncheck the Test Run field and choose Execute (clickor press F8).

The system should notify you that processing was completed without errors. The number of senders should be 1 and the number of receivers 3. Go backto the SAP Easy Access menu.

Examine the results of the assessment in your three cost centers, using thefamiliar report Cost Centers: Planning Overview (transaction code: KSBL).

The maintenance and assembly cost centers should have been charged witha canteen assessment of 30,000 and 90,000, respectively, and the canteencost center credited with 120,000. 30,000 remain with CC-CA-##.

You may have noticed that the activity inputs and activity allocations of costcenters CC-AS-##and CC-MA-##are still valuated with zero, even though allthe quantity information has been entered. This is because no prices havebeen planned yet for the involved activity types. We will do this next.

©SAP

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Automatic Pr ice Calculation of Two Activi ty Types

In the Cost Center Accounting menu, choose Planning Æ AllocationsÆ PriceCalculation (transaction code: KSPI).

Choose the first radio button (Cost center group) in the Cost centers fieldgroup and enter your cost center group, GROUP-##. Also choose NoBusiness Processes, the Plan/actual version [0] and periods 1 to 12 in thecurrent fiscal year.Uncheck the Test Run field again and press Execute. If everything workedcorrectly, the SAP System reports that the calculated prices have beenposted correctly (“Results of iterative activity price calculation have beenposted”). Press ENTER to display the prices. Write down the prices thesystem calculated for your activity types:

Total price for CC-AS-##and activity type A-##: _______________

Total price for CC-MA-##and activity type M-##: _______________

Examine the results of the price calculation in your three cost centers inreport Cost Centers: Planning Overview (transaction code: KSBL).

Your assembly cost center report could look like the example below:

As you can see, the canteen costs and assessment of the maintenance costcenter amount to 120,000. Production wages in the amount of 150,000 arealso incurred. If the total input is 6,000 hours, this results in a price of 45.00for an assembly hour.

©SAP

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Integration with the PP Module

The integration between Cost Center Accounting and Production Planningand Control is the result of assigning work centers to cost centers. You will

implement this below – based on the information you used in the PP casestudy.

Creating New Work Center for Cost Center

The work center organizational unit (for example: person, machinery,etc.) defines where and by whom an operation is performed. A workcenter has a specific available capacity. The work performed there isvaluated using allocation rates that are determined by cost centers and

activity types.

In the SAP Easy Access menu, select Logistics Æ ProductionÆ Master DataÆWork Centers Æ Work CenterÆ Create (transaction code: CR01).

You want to create the work center in plant [1000], with the name ‘CTR-##’.As usual, you substitute ##with your group/computer number. Choose workcenter type Labor [0003] and use work center Assembly IV [1420] in plant[1000] as a template. Press ENTER.

In the Copy from… window, choose all the selection areas aside from Costing. Then click Copy or press ENTER. The Create Work Center: CostCenter Assignment view appears. Enter today’s date as the start date. Enterthe cost center you created, CC-AS-##, as the cost center. Then start theinput help (F4) in field Activity Type for Setup. Only your activity type, A-##,should be displayed. Select it. Then define key Prod.: Setup time [SAP001]as the formula key.

Proceed in a similar fashion for the Machine Time and Labor Time, using thefollowing data:

Activity type Formula key

Machine time: A-## [SAP002] Prod: Machine time Labor time: A-## [SAP003] Prod: Labor time

Then click to save.

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Integrating New Work Center in Routing

In the SAP Easy Access menu, select Logistics Æ ProductionÆ Master DataÆ Routings Æ Routings Æ Standard Routings Æ Change (transaction code:

CA02).Choose your routing for the material UCC-MOTORCYCLE-## in plant [1000],select today’s date as the key date, and press ENTER. Then double-click onthe description for operation 0020.

In the next screen, first delete the default values and activity types in theSetup, Machine, and Labor lines. Then press ENTER.

Now overwrite the value in the Work Center field, 1420, with CTR-##, yournew work center. Press ENTER to confirm. Enter a time of 6 Minutes in theline for the setup time and A-## as the activity type. Proceed accordingly withthe second line (machine time): enter a time of 60 Minutes and A-## as theactivity type. In the last line, enter a labor time of 120 Minutes and A-## as

the activity type. Then press ENTER to confirm.

Click to return to the operation overview and then click to save changedrouting.

You have now added a new work center, valuated with your activity type, tothe routing for assembling the motorcycle. As a result, the prices you justcalculated will become effective during the next product costing. As youprobably noticed, the new work center will be much more efficient.

Performing New Product Cost Estimate

In the SAP Easy Access Menu, choose path Accounting Æ Controlling Æ Product Cost ControllingÆ Product Cost PlanningÆ Material CostingÆ CostEstimate with Quantity StructureÆ Create (transaction code: CK11N).Choose your material UCC-MOTORCYCLE-##, the plant [1000] Hamburg,and – in the Costing Data tab page – costing variant [PPC1], costing version[1], and costing lot size [1]. Press ENTER to confirm.

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In the next tab page, Dates, press ENTER to save the default dates. Thesystem will now cost the material based on the bill of materials and thechanged routing.

The valuated BOM is displayed in the upper half of the screen. Themanufacturing costs are estimated as 1,482.40. When you choose Costs Æ

Itemization (or press F6), the itemization is displayed in the lower half of thescreen.

Click in the lower screen area and choose “Select Layout...”. Choosethe layout Operations (Grouped) [1SAP06].

Items 6, 7 and 8 in operation 0020 contain the costs of the second operationin the assembly routing, with your activity type A-##, rendered by work centerCTR-##.

You can see the allocation rates that have been charged for 6 minutes, 1hour, and 2 hours of assembly activity.

To display the individual cost components, choose menu path Costs Æ

Display Cost Components (or press F5). Click once again and choose“Select Layout...”. This time, select the layout for Cost Component Groups [1SAP02].

Save your costing as an [Itemization] and a [Log] and press ENTER toconfirm.

You’re finished!

Several of the ideas in this case study are based on materials developed by Mr Martin Voß (University of Passau) and Mr Heino Schrader (SAP AG), whose work is acknowledged here.

This publication or parts thereof may only be disclosed to or reproduced by faculty members of institutionsconnected to SAP University Competence Centers, for use in teaching. Material may not be disclosed indigital form. Any changes to the content of the case study, or any changes made to the case study texts –minor or otherwise – must not distort the origin of the intellectual property, as input in person by StefanWeidner (SAP UCC Magdeburg). Should you have any queries, please contact the author.

SAP, the SAP logo, the R/3 System, and any other SAP products and services mentioned in this text,including the relevant logos, are trademarks or registered trademarks of SAP AG in Germany andinternationally. All other names of products and services are trademarks of the companies in question.

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